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Amazon's No Enemy. In Fact, It Needs Us, US Xpress CEO Says

A vague mention of Amazon.com Inc’s interest in any sector might be enough to send investors into a tizzy, but the top executive of US Xpress Enterprises Inc. is unperturbed.

“We see Amazon as a large customer and a good partner,” CEO Eric Fuller said in a phone interview. While the e-commerce giant has been dabbling in trucking and logistics initiatives, including a trucking app and its own delivery network, Fuller doesn’t see it as a threat.

“If Amazon adds trucks, that isn’t going to completely change the fact that they are still going to need a lot of capacity from some of the largest trucking companies,” Fuller said, comparing it to Walmart, "One of the biggest trucking companies out there, but they also are just about everybody’s largest customer, and that is because they need so much capacity.”

US Xpress’s biggest customers include both Amazon and Walmart, as well as Home Depot, Fedex, Dollar Tree and Dollar General.

The Chattanooga, Tenn.-based trucking company debuted on the New York Stock Exchange on June 14, with shares gaining 3.9% over two days. The market has been good for the group over the past year, with a standard gauge for the sector -- the Russell 3000 Truckers Index -- gaining 37% versus the broader S&P 500 Index rise of 14%.

While IPOs that have listed in the U.S. this year have returned 33% on average, weighted by offering size, those that price below-range, like US Xpress, have missed much of the rally, falling an average of 2.7%, according to Bloomberg data.

Fuller cites strong demand and a depleting supply of drivers as reasons for industry strength. With construction and manufacturing sectors growing briskly and continuing to hire, job seekers now have many options.

“Those jobs have you at home every night, and truck driving has you out on the road,” Fuller said, adding that there has also been a generational shift in attitude toward the job. “The younger generation does not necessarily want to go into a job like trucking.”

But limited capacity at a time of steady demand has afforded the truckers strong control over pricing -- and there is also another, less direct, benefit.

The lack of drivers makes it difficult to expand capacity, but it also creates a barrier to entry for newer players. “It’s a highly fragmented industry and we think that this shortage is probably going to lead to a little less fragmentation,” Fuller said.